Loan classifications.

CFR · 2024-01-01 · US · Title 7

All loans to intermediaries in the Rural Development portfolio will be classified by Rural Development at loan closing and again whenever there is a change in the loan which would impact on the original classification. No one classification should be viewed as more important than others. The uncollectibility aspect of Doubtful and Loss classifications is of obvious importance. However, the function of the Substandard classification is to indicate those loans that are unduly risky which may result in future losses. Substandard, Doubtful and Loss are adverse classifications. The special mention classification is for loans which are not adversely classified but which require the attention and followup of Rural Development. The loans will be classified as follows: (a) (1) Have a remaining principal loan balance of two-thirds or less of the original aggregate of all existing loans made to that intermediary. (2) Be in compliance with all loan conditions and Rural Development regulations. (3) Have been current on the loan(s) payments for 24 consecutive months. (4) Be secured by collateral which is determined to be adequate to ensure there will be no loss on the loan. (b) (c) (d) (e) (f)

official document · source cfr-2024 · id 7:§ 1951.885